Brent hits $90 as Middle East attacks choke Hormuz transit
Oil prices surged to mid-June highs after a US naval blockade and Iranian retaliation halved traffic through the Strait of Hormuz, threatening a crucial fifth of global supply.
Brent crude surged $2.69, or 3.05%, to reach $90.79 by 2343 GMT, while US West Texas Intermediate climbed $2.19, or 2.65%, to $84.68. The aggressive rallies pushed both benchmark contracts to their highest levels since mid-June, driven by a ninth consecutive night of US military attacks against Iran and retaliatory Iranian strikes reported by US allies Kuwait and Bahrain.
For financial markets, this price action represents a violent repricing of geopolitical risk that alters the energy landscape. Brent logged a 15.9% weekly gain, its largest since April, and WTI rose 15.5%, marking its steepest weekly ascent since early March. Such rapid escalations typically trigger margin calls on leveraged energy positions and force broad short-covering, amplifying the upward momentum in crude futures.
The primary driver for investors is the tangible threat to physical supply chains, as both belligerents are now actively targeting commercial shipping. The US is enforcing a naval blockade on Iranian ports, and Iran has stated it is actively targeting vessels violating its rules for navigating the Strait of Hormuz. This critical waterway typically handles one-fifth of global oil trade, making it an immense vulnerability for global energy markets.
Transit data from LSEG confirms that maritime shipping is already seizing up, with only four vessels making the transit through the strait on Sunday, down sharply from eight the previous day. However, complete paralysis has not yet set in, as at least three oil products tankers and one Very Large Crude Carrier entered the strait since Friday specifically to load crude.
The rapid halving of daily transits underscores the immediate danger to global oil logistics, meaning current prices will likely serve as a floor rather than a ceiling if traffic declines further. Manufacturing and transportation executives must now prepare for significantly higher rolling fuel costs in future quarters. Furthermore, a sustained breach above $90 a barrel introduces fresh inflationary pressures precisely when central banks are assessing their monetary policy trajectories.
